Skip to main content

tv   Fast Money Halftime Report  CNBC  September 30, 2016 12:00pm-1:01pm EDT

12:00 pm
>> valuation tech stocks don't seem to be taking it on the chin. they've not just had a great quarter, but they're having a great day. amd, which isn't high valuation, but it has been volatile, still up better than 3% today. >> we'll kick off the month of october on monday. have a great weekend. let's get over to headquarters and the half. ♪ >> welcome to the halftime report. i'm scott wapner. top trade this hour, the deutsche bounce. why stocks are rallying back today, and whether concerns over germa germany's biggest, most powerful bank are overblown. with us for the hour today josh brown, steve weiss, jim, rob with us as well. he is with ubs private wealth management. one of barrons top 100 advisors. also on set today is adam parker. he is morgan stanley's chief u.s. equity strategist with us for the hour. rob, good to have you back. our own michelle caruso cabrera is here as well.
12:01 pm
always gooed to have you. have we made too much of deutsche bank? >> i don't think so now. it may be specific to deutsche bank, but i don't think you're supposed to be in the stock here. this reminds me too much of lehman and bear stearns. were there bounces up like today's for those two names? of course, there were. >> i am suggesting deutsche bank the stock is not something you should be playing with right now, and there probably will be repercussions. not fatal. not kpait for the rest of the finance center. >> this guy was a subcommander, and here he is chicken little. i don't know how you can mention -- >> i'm not chicken little. >> how can you mention it this in the same --
12:02 pm
>> this -- >> you're going to talk about the deposits. >> they didn't have backing from a central bank. deutsche bank has tons and tons and tons of assets, and it's not a electric widty issue. >> whoever thought it was going to be 14 -- >> that's not what the problem is. i know there are deposits, michelle. you're correct about that. the problem is counter parties are pulling away from deutsche bank. >> it's a run on the investment bank, right? it means you end up with a c crappy prime brokerage, and add it to the issues they face. >> let's separate the issue here. when you have a situation like this, you don't look at theic quit. you go and look at the credit. you see what the debt is. a report came out that upgrade
12:03 pm
the debt, actually. >> they're going to add to it. there's no way in my view that deutsche is going out. i said yesterday that i don't think there's any contagion. it's an emotional trade. that's what's drawing. today where he think -- i think it's emotional to the up side. in no way it's a systematic issue. the market is telling you today it's not a systematic issue. it's an earnings issue. they needed their earning to build their cat base because they may have to issue more capital as the stock falls. >> all i'm saying here is the stock, and you asked me, is this 2008 again. i said no. i'm saying specifically deutsche bank stock. this is not a stock. you don't want to -- i'm saying it's not 2008. i said that three times. zroo if i may bring data into the conversation, for all the
12:04 pm
noise the s&p 500 is virtual unchanged for the month of september. >> it's a decent proxy. it brings in noncontinental as well up 0.85. efm, we use that as our proxy. european financials down less than 1% on the month. yeah, there's probably some reason to be concerned. the market is not treating this like it's the next 2008. at least not yet. i don't think we should be using deutsche or lehman in the same sentence unless we're joking around. >> this whole thing in yesterday was more a sign of how fresh 2008 still is rather than what's really happening at deutsche bank. it's something that happens in everybody's life. they're looking for the next 2008. >> part was the news story that hedge funds have pulled their money out. now, as i said yesterday, i'm a hedge fund investor. that's what we do. we invest if hedge funds.
12:05 pm
if i had a hedge fund i was invested in at prime to get their balances at deutsche -- we don't. it just happens to be the way it works out. i would say do you have money there? there's no up side in doing it. their balances could get locked in there for a year, two years, three years. >> that's only if -- that happened and lehman was liqu liquidat liquidated. it's never happened. >> i want your comments. this is how we sort of roll here. it's like a conversation. >> you have the next 50 minutes. >> you're at the table. >> that's about right. thank you. >> are we overdoing it? are people overdoing it? >> i like u.s. equities, and i can't imagine one european bank changing that perspective. there's so many reasons to like them. the fundamental expectations are too low. they look cheaper. it's almost every other asset class that people want to position of the big upside. >> i would be inclined to buy things when there's a lot of
12:06 pm
fear because i think it is a liquidity issue and it makes it wholly different than 2008. when i look at u.s. financials. i think the bigger issue that could keep people away from dpnls and we're neutral on u.s. financials is because our view is ultimately that the ten-year yield continues to trend lower and the fed doesn't act as much as people think. we have a big trade after july earnings, and banks have people believing the fed was going to go twice. i take the under on that. i'm a little bit more balanced on it, but my bias would be that there's nothing that's going to. >> do you think there are a lot of people that need the next deutsche bank to justify a lot of the things that they've been saying for years and years now -- in other words, the only way to get out of the bear was for a massive systemic event. a 10% correction is not going to bail out. >>. >> i think people's rhetoric is bearish more so on the position.
12:07 pm
>> we've seen that before zbloosh. >> i don't think that gets them out of it at this point. i think ultimately you have to put your money somewhere. you look around the world, and you have to say risk-reward, and i think the main conversation i'm having with people is if bond yields go lower, it's really hard to see things attractive in that market, so you look around the world of equities, and then u.s. probably has the best risk-reward. you know, yeah, you will have volatile days, and maybe it will be a great day in the sun for european equities, but -- >> to josh's point, august 15 was the next 2008 when china was having its issues. august of this year was the next 2008. that just shows you kind of -- >> one of these days -- >> emotional things that can happen in a market and it's what happened yesterday. >> we're being -- listen, this is not 2008. you can't trivialize. this is deutsche bank. this is a huge -- this is a huge global institution. think about this. you are making the point, steve,
12:08 pm
that hedge funds, 23 approximate you were in a hedge fund that was invested, you say why did they have their prime brokerage there? you don't think skorpt treasurers around the world are doing the same thing? are looking at deutsche bank and saying if we've got dpooif relationships with five global banks, why do we have any deutsche bank in this? >> our point is supposed to be this. if the market, like it did yesterday, has a big throw-up and it goes down because of this story, do you buy the stocks? you buy the s&p? >> yes. you don't -- yes, you do, but you don't ignore this risk. everybody here is trivializing this, like deutsche bank is -- >> okay. >> we're saying we don't care about deutsche bank as a stock. >> if we were to get to that point, we would have a moment for -- >> they're not letting the banks
12:09 pm
go down. >> i'm not even asking whether dooub bank is a go ahead buy here because it's not the point. >> when we talk about 2008, we're talking about one in hundred thousand, you know, probability events. these are not the things that investors should be focused on. it's not that horrendous things can't happen. it's that they don't happen with the frequency that we discuss them happening, and i think that is really the key. it's not about trivializing deutsche bank. of course, if something terrible befell the bank, it would be negative. >> let's just get another voice in the conversation as well to help us along. chris whalen is with the kroll bond rating agency. you've heard of the conversation, presumably. is deutsche bank being overblown, or are we not taking it seriously enough? >> no, it is being overblown. we view it as a solid credit. we work with this bank of day in the abs market. unfortunately, the department of justice started this and then the comments that were attributed to chancellor merkel's office this week, i
12:10 pm
think, really got a lot of investors upset. obviously the german government is going to support their banks if they get in trouble, despite what rules they put in place. it's all about confidence. we don't see any credit issues with this bank. sure, do they need more capital? do they need to fine-tune the business? sure, we all know that. it's the statements by politicians that are not well considered and can which violate the basic rule that every regulator knows, and that's that you don't talk about banks that are open. fdiy, fed. they never do that. the politicians are always looking to take advantage of banks. in this case they made a big mistake. the difference between 2008 and today is what as it pertains to deutsche bank?
12:11 pm
>> well, first off, it's a bank. it's not a broker dealer that's dependent on banks and markets for funding. this is a very, very large, very well diversified institution, as you were just saying. have they been hurting on the earning side? yes. everybody in the capital markets has been feeling it. that's nothing new. we just put out a report this week about many large banks are not hitting their cost to capital. we know this. the real catalyst was the ill considered badly timed statements made by the department of justice and apparently angela merkel's office in germany, which really i think are beyond the pale. we can't have people getting into the markets this way because it is not helpful. >> you're with a bond rating agency. we've been making the point. this isn't -- certainly doesn't seem to be at this point a credit issue in any way, shape, or form. >> no, not at all.
12:12 pm
>> we care about if they can pay its bond holders, act as a trustee in the commercial mortgage backed space where they're one of the leaders, by the way, and we always view this bank as an investment grade credit. i think that, you know, we all have to take a deep breath, realize they're going to do a settlement. the headline number, by the way, is not the cash number. the cash number is a fraction of the headline when they finally settle with the u.s., and then, you know, we move on to the next thing. i think the more important issue is that if you look at italy, you know, the itsians have been trying to get jamie dimon to come in, and we can't because we don't know what the net assets are. the same thing goes for all the european banks because their accounting rules are different from the u.s. we don't know what the situation is. i think europeans have to realize because if they are proactive, investors want to get involved. there's plenty of money to go
12:13 pm
fix this. we need more transparency. that's just what the net asset value of these banks are, and then we can move the process forward. statements like we saw this week that were apparently attributed to the german government are decidedly not helpful. >> based upon your estimation, assuming a $5 billion settlement with the u.s., which is what you hear from analysts most often, how much do they have to dilute the equity from here to be comfortable with your -- >> i -- i don't think that's even the issue. i think the bank can easily pay -- even if the gross number was cash, which it's not. remember, it's going to be a fraction of that.
12:14 pm
ultimately they have to go out and raise. we don't see short-term crisis here. this is just a lot of people hyperventilating because of ill considered statements from the political sphere and a lack of information. as you guys were just saying. we could see a settlement. >> they're finally able to sell and assets they're trying to get rid of. the first step is going to be selling assets. >> that's a difficult process. it takes months, even years. all of the banks that have a similar profile to deutsche and there are many of them, have to change their business models partly because of the fed, partly because of what's been going on in the abs market. in the beginning of the year, basically it shut down for a quarter. it's come back a good bit now. i think we just have to kind of take a time-out here because
12:15 pm
when i got off the plane coming over to ireland, the first thing i see is angela merkel in the frorcht pa front page of the irish times. we have to get the politicians out of this game. >> chris, i appreciate the time where. weelg see you soon. >> have a good weekend. >> did you see john stumpf yesterday? politicians love to be in banking. they can't help themselves. i wish they would stop, but they're not going anywhere. this is their bread and butter lately. >> this market -- i agree with everything that adam said. this market reminds me about 2014 where we had a grinding market for a long time. we had concerns about qe ending, and then the fourth quarter ended up posting significant returns, and we ended up in double digits for the year. i think without these spheres markets can't advance because there's no delta to move them
12:16 pm
higher. when i look at the u.s., it's a back drop of accelerating growth, low inflation, and supportive policy. oh, by the way, that accelerating economic growth is going to lead to better profit growth in the third and fourth quarter. >> isn't this a remindser that volatility is back and with an election only a handful of weeks away, it's likely to remain this way until the end of the year? >> what are you doing, right? you are buying your little dream today, and then you are selling it hopefully to a sucker with a bigger dream later, right? if i look around, is there a lot of big dreams? i don't think so. i feel like people aren't dreaming that there's an economic recovery, that there's earnings up side versus zero expectations. i think i'm buying kind of a small dream. >> your price target for the next four months. >> mid single digit base case subjects. pretty good risk-reward.
12:17 pm
i think there's a lot of stocks you could own that could see multiple rerating. i think there's pretty good risk-reward. every one of these things that we can get concerned about in the last few years, i think about things i plotted on my computer. portuguese cd. i may be disabling my computer from these futures because they clearly turn out to be buying opportunities. the thing that would page me nervous would be something that could change my outlook double digit down per earnings. we have to focus on what the risks are that can make earnings go down 10%. >> we have the oil thing. we had that in real life. we had the oil thing for basically six quarters. you know, we genuinely had an earnings problem, and it seems to be ebbing nicely now. >> earnings were flat for the whole -- >> you could look through oil and just look at the other
12:18 pm
sectors. >> you have a ph.d. in statistics, right? >> yeah. they give those away. >> you kind of gave it away with the computer comments. you are with us for the hour? >> yeah. >> see you later. >> see you. >> thanks for being here. michelle caruso cabrera, she'll be on "power lunch" obviously. just getting started on the halftime report. >> chips on the block. the semis having their best quarter since the financial crisis. now one top analyst has a new call on a big player in the space. plus, your fourth quarter playbook. the final three months of the year starts monday. are you ready to beat the market? follow us on twitter and halftime report. scott wapner and the gang are back in two minutes.
12:19 pm
12:20 pm
12:21 pm
>> we are back on the halftime report. this now 98. the semiconductor stocks are on a tear pacing for their best quarter since 2003. today qualcomm got upgraded a buy following reports of a potential deal to acquire nxpi. that's nxp semiconductor. who owns qualcomm here? jimmy? >> yep. i love the deal. for two reasons. one, obviously, it diversifies
12:22 pm
the products that qualcomm has. they've been too dependent on smart phones. i'm not hearing people talk about this, it's a good use of their overseas money. obviously, it's a global company with a major footprint in the u.s. this is a good way to take dormant cash overseas and put it to work with an asset without having to repat yags tax. >> you're underweight tech? >> we're underweight -- >> because of the run? >> really combination of two things. it's not specific to semiconductors. thinking of a great run, you know -- >> they've been on fire. >> it's really less about that than it is more broadly -- i break tech into two. you have value tech, right, and then the growth terk. value tech is the scene in declining revenue right now. last time you saw was 2008. last time was 2001. before that 91, 92. it's tougher value tech to work with out of product cycle or end market recovery. m&a can make sense. i think on the growth tech side, the challenge has been more that
12:23 pm
margins are contracting. what makes growth tech work is more margin expansion than it is regular growth. >> when you say value tech, what are we talking about? microsoft? old tech? >> you can call it old tech. you could call it things that trade at multiples below the market average. >> yeah. >> i don't have the -- >> you have had declining sales for the past few years. the intels of the world, the microsoft of the world. the disposition in that sector is to believe that we're bottoming. now, that may be true in some of them. intel, you had a preannouncement that was positive a couple of weeks ago. microsoft may be getting wind in its sails. the predisposition is to believe that the sales are going to start growing. >> you saw this in q2, though. >> of course, with these multiples, what you point out are well below the market. these are safe buys. >> look, there's -- i like, there's 63 industries in the mrkt. 11 sectors. of the 63 industries right now
12:24 pm
only 12 of them are cheap versus their own history. there are some parts of value tech that would screen in there, but i think if the market keeps slowly moving higher as we expect, i think people will look for stocks that are a pretty big discount with the revenue plateauing. i think for them to really rip, you need to believe in end market picks up and the revenue grows, and that's why you are seeing a lot of m&a, synergies, cost -- >> i think you get that in a lot of the big names. i think, like a name like intel is a really good example. >> they have chips and all the important server products now where are be i think people have overlooked. it's a two spot eight yield. 100 basis points over the ten-year. you've got earnings growth. you have a company that's preannouncing. to the up side. you have a 16-year high in the stock. there are no sellers. one of the most pristine charts in the group. the group itself is now leadership. >> don't throw growth tech under
12:25 pm
the bus either. i mean, look at what used to be called fang has been able to do in the face of naysayers that said that trade was done. >> you've done much better than those stocks. you could have made this argument with qualcomm, and i played it. you know, over the last four or five years at any point in time the same exact argument. >> you were only right in the last year. >> that's exactly my point. >> it was painful. >> exactly our point. stocks underperformed. the stock was at 80, what, three years ago, four years ago. you are still not back there. you have to be very careful. you've actually done much better than the growth stocks, momentum stocks, even though the volatility is much greater. you can't make money without volatility. >> on the final day of q3, our panel of experts are going to
12:26 pm
give you help in beating the market in q4. tlas coming up. first, let's show you the s&p sectors. we'll take i to the wall for that. s&p up nearly 19 points. financials, nice bounceback leading the way. halftime report back after this. 98,352 what's that? the number of units we'll make next month to maximize earnings. that's a projection. no, it's a fact. based on hundreds of proprietary and open data sets folded into a real-time, actionable analytics model. nine. eight. three. five. two. you're not gonna round that up? you don't round up facts. powerful analytics driving decisions for the world's most valuable brands. hewlett packard enterprise. (ee-e-e-oh-mum-oh-weh) (hush my darling...) (don't fear my darling...) (the lion sleeps tonight.)
tv-commercial
12:27 pm
(hush my darling...) man snoring (don't fear my darling...) (the lion sleeps tonight.) woman snoring take the roar out of snore. yet another innovation only at a sleep number store.
12:28 pm
12:29 pm
>> the mies of the day. nasdaq up nearly 50 points. it's about 1%. in fact, you've got about 1% a little greater than that as the dow -- pertains to the dow across the board. the dow right now up 186. it is crunch time on wall street. the third quarter coming to a close. all major averages as we just showed you in the green today. with just three months left to trade for the year, i want to go around the desk for some fourth quarter playbooks. adam parker, i start with you. >> three ideas. one, we break the market into growth value and neither with a quantity takive model. the best performing has been neither. that's a problem. ultimately people are going to start saying there's some deeper value stuff to get rerated. maybe it's biotech. maybe it's credit card or airlines. maybe i'll go for some faster growth and take the multiple contraction. that's sort of the battle. i really like biotech. i think you can short either pharma or software against it,
12:30 pm
if you want to short broet growth. do software if you want. short the yield play. it's pharma. it's mispriced. too much is discounted about the pipeline. then i like another pair that's long utilities, short staples. you have to probably have some rate exposure if you don't get a backup in yields, and they're much cheaper for the stability, and they don't have the currency exposure that can can -- >> it looked like wield get a backup in yields. we did. >> right. >> albeit for a minute. >> yeah. people get very excited that the fed would act a lot. i don't get all the fed conversation. if i could tell you what i have on my inbox that i would like to delete, it's fed. i'm 90% sure that it's either zero or one hike in the next nine months. if i know that, and i know neither affects cost to capital or anything else, just like please unsubscribe me from that box, and let me focus on what could go wrong, which is probably china gets worse than people think because nobody is talking about that, where.
12:31 pm
>> usually they're kbrurnd performing. usually the word policy mistake is someone who is underperforming. we'll tell you that. if you look at it from macro-wise, the market is near an all-team high. what do they do that was a policy mistake? that's my view. you know, what's your excuse of underperforming? bad stock picking. i not the fed policy. >> i agree. i agree. profits have kept up along with the fact that you've had supportive policy. we like the u.s. in terms of quality transparency, consistency, and growth. we like the support that's there. we like the emerging markets too from a valuation perspective. if you believe in -- if you believe in the cyclical recovery, you have to think that emerging markets are going to do
12:32 pm
well in an environment of abundant liquidity, low u.s. rates and commodity prices recovering. we like that kind of going into q-4. >> two trades here. one is the easy one. just continue the trend with the old line technology. my top pick there would be cisco systems. we're talking about intel a second ago. cisco has all the attributes. it's about to set a ten-year high. 3.3% yield. that's a good place to look. on the more dangerous and a lot more upside, you could take a look at bricks and mortar retail. this is the time of year where some people get a little bet more enthusiastic. usually the stocks build into black friday after thanksgiving. >> i don't like emernling markets where are i object think the dollar will strengthen. if oil does strengthen, urts not going to be good for them. >> i disagree on that, because if you look at back in 1997, most of those countries funded
12:33 pm
externally, which means they funded in dollars. the problem that you are talking about is exaggerating in that environment. >> i don't leak emerging markets still. i think the u.s. market is the best market. >> i agree. >> 34 weeks back dploe is my biggest strategic mistake. >> it's my risk part for the portfolio. it's not not, but it's not a broad allocation. europe, that was my biggest mistake. this year an allocation to europe, 34 weeks of outflows. yet, the market has held up. not going there. i like the u.s., but like you, i'm very low return environment. personally i think you want to be in longer duration
12:34 pm
investments illiquid longer duration investments. i love biotech still. i would be on the other side with you and shorting pharma because i think they're undervalued, and the only way they get growth is by buying biotech. in terms of a single stock, what i really like is atk. they had an accounting issue at one immune ikss plant, small one. they keep saying they're going to file. you have to get up to speed in october. that stock will go back up to 90. great -- >> as we move into the second half of the year, as policy starts to diverge, potentially diverge globally, hedge funds have massively underperformed. what is your view -- >> why do you say massively underperformed? here's the hedge funds. all the investors said we wanted low vol. giver us 5% vol.
12:35 pm
bits 15%, 16%. they got that wrash they forced them into this. they went to the huge stage at 40 billion. bridgewater, 130 billion. they can't perform. >>le 2% of outperform one year and five year and ten of this year periods. they've done worse. >> do you think they're setting up for -- >> your steam correlations broke down. i wrote something in may that hedge funds were going to outperform, and they have since may. you are seeing good performance. the numbers we're seeing this month and last month were much better than the market. they're down 14 dips. i think you're okay. >> i didn't really -- >> i'm out of breath. good timing. >> you should be as long as you went for. josh can't even do his. >> you can take some of my time.
12:36 pm
>> i don't know. i have to get to some of the commercials. >> your playbook for the fourth quarter is like, 8,000 pages long. >> this is an important point. if you did the right thing from an asset allocation stand point last year and bought them, you are doing very well this year. up 17%. they've complemented what you've done in the u.s. we'll be back. >> coming up, health insurance take on how much we need to worry. first stock 52-week highs today. p & gg, varian and invidea. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.
12:37 pm
12:38 pm
12:39 pm
>> hi, everybody. i'm sue herrera. forecasters in miami say hurricane matthew has strengthened into a major category three storm in the caribbean. they say people along the caribbean coast of venezuela, columbia, and eastern cuba should watch its progress closely. computer models show florida and the northeast safe from any
12:40 pm
major impact. the cdc says the zika virus is mostly mild among children and teens who have been infected by it. all 158 cases were caught while traveling to is it and from other countries and nearly all had mild symptoms. the european space agency says the rosetta spacecraft has crash-landed on a comet after an historic 12-year chase across more than four billion miles of space. as you can see, scientists at the control center applauded after screens showed the loss of signal as rosetta hit the comet. pope francis held talks with the georgian president upon arriving in the capital city. he also met with the patriarch of the orthodoxed church. he is in georgia for a weekend of meetings with catholics, orthodoxs, muslims, and jews. that is the cnbc update this hour. now to melissa lee with what's coming up on power lunch. >> hi there. thanks so much. we have a jam packed show at the top of the hour. what a difference a day makes.
12:41 pm
germany's biggest bank tanking. today on tractor its best day in five years. a settlement with u.s. regulators, is it close, and tech, a bright spot in this recent volatility. the best performer this quarter. will that hold in the new quarter? and a post-election pop. we are crunching the data. all that and more at the top of the hour in power lunch. these goofy glasses.
12:42 pm
yeah. well, we gotta hand it to fedex. they've helped make our e-commerce so easy, and now we're getting all kinds of new customers. i know. can you believe we're getting orders from canada, ireland... this one's going to new zealand. new zealand? psst. ah, false alarm. hey! you guys are gonna scare away the deer! idiots... providing global access for small business. fedex.
12:43 pm
just like that, a moment turns romantic. so why pause to take a pill? and when you're having fun why stop to find a bathroom? with cialis for daily use, you don't have to plan around either. it's the only daily tablet approved to treat erectile dysfunction so you can be ready anytime the moment is right. plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, or adempas for pulmonary hypertension, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or any symptoms of an allergic reaction, stop taking cialis and get medical help right away. why pause the moment? ask your doctor about cialis for daily use. and for a $200 savings card, go to cialis.com
12:44 pm
>> shaping up to be the stock story of the day. deutsche bank shares pretty much at their highs of the day. up 14% off some reports of a nearing settlement with the justice department here in the united states for a payment that would be much less than the $14 billion imposed by the united states justice department. again, that is just a report. it has led that stock right there to be up 14% at this hour. let's bring in mohammed. he is the chief economic advisor at alianz. thank you for being here. >> thank you for having me. >> is this a crisis we need to be concerned about, or will it soon pass? >> i agree with those who said
12:45 pm
earlier on your show, this is not a lehman moment, this is not 2008, but it's a lot of other things. for example, it's a reminder that investors in european banks are subject to the real and present danger of dilusion. it's a reminder of another head wind to european growth. the politics of banking will get even more complicated. it points to the weakness of macropotential policies. all in all it's not a lehman moment. it is something to look at, and it will create contajon risk and the risks an opportunity that come for that. >> it sounds to me that the opportunity that comes with that is once again the view that the u.s. is the best place to be. >> it is the best place to be. we have a much stronger banking system and much morrow bust economy. the extent to which we depend on
12:46 pm
continuous liquidity from central banks. >> it's josh brown. good to have you on. so following that train of thought, if you are allocating capital today and are you someone that's got a time h horizon of three to five years as opposed to, you know, three to six months -- >> or three to six minutes. >> are you considering european equities ex-banks given the fact that you haven't had much many in the way of gains there, but the earnings picture is probably the same as well. is that an area that you would look at and say, all right, valuations are low enough. i'm willing to weather the headlines. >> that's a great question. the first thing i would say to that investor is i have bad news for you. you've got to be more tack technical than strategic these days. the strategic structural picture is really clouded.
12:47 pm
you have the situation where patient capital is in a less good place today than short-term capital. >> does the fed move this year or not? >> i think they move in december. it not a done deal. let me tell you why. look at what they've been saying recently. they're starting to put more ga sis on the risk of stanlt. why is this? the economic developments are very balanced. you need a tiebreaker for them to go. you need a tiebreaker. that tiebreaker may be concern about risking financial stabl down the road by keeping rates too low for too long. >> but that's been the argument for as long as we started having this conversation some years ago. >> but we are starting to hear more federal officials talk
12:48 pm
about it. we've had three in the last three days talk about this. >> i'm watching the ten-year yield at the highs of the session. you know, just earlier today we were looking at 1.55. now we're at 1.61. it's reflective of the less fear in the market today obviously given some of the concerns about deutsche bank that seem to have a little bit of a reprieve at least for this very moment. what's your best guess of where the ten-year yield will be come september? >> that's less a question about the u.s. and more a question of europe. it's not just the u.s. that's widened now from earlier, but the bund has as well. if you are looking at ten years and beyond, that's going to be
12:49 pm
determined in great part by what happens in europe and in yjapan. that's the reality today of the connected markets. >> you know, i got a quick question from adam parker, who says with us on the desk. >> you said you like u.s. what is the biggest risk of that thesis is? what could derail your optimism about u.s. on a relative basis? >> so, a couple of things. one is it turns out that we got a policy mistake. i think that's the low probability. that would certainly derail the thesis. the second one is the politics. you could get a situation -- i think it's low probability, but there could be a situation where trump is elected president, and he decides on day one unlike what the brits did -- he decides on day one to announce exactly what he is going to do in terms of what tariffs on mexico and tariffs on china. if he does that and if he moves immediately to do that, then
12:50 pm
that will cause markets to have quite a volatile period. i think that even if he is elected, he would probably end up doing what may has done in the u.k., and that's go and not announce anything immediately saying we're in the process of negotiating. >> mohamed, appreciate the time. see you soon. the futures now gang has a warning for anyone thinking of getting into one commodity that had a strong run this year. more "halftime report" back in two with that story. ♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪
12:51 pm
12:52 pm
12:53 pm
welcome back to "the halftime report." i'm jackie deangelis with the futures now traders. we're talking nat gas, a drop of 2%. scott nations, where are we backing off the critical $3 level? >> we're falling in sympathy with crude oil. the november contract is a bit of a dead zone, won't get a lot of support from electricity production or home heating and we're now falling back towards the 50-day moving average. we're still above all the important moving averages, but the 50-day moving average would be the next level. that level, $2.805. >> would you be a buyer of nat gas as we head into the winter season and the injection the other day, nearly half of what we saw this time last year. >> this is the weaki isest time. until about mid-october is the
12:54 pm
weak season for natural gas. however, you get a 2% move along the trend line, upward trend for the last few months, i think it would be worth taking a shot here. i'll think that upward trend is broken if it trades below 2.8 and feels comfortable there. right now, probably would take a shot. >> for more futures, head to the website, futuresnow.cnbc.com. the live show on tuesday at 1:00 p.m. more "halftime" after the break. stay with us. i'm here at the td ameritrade trader offices. steve, other than making me move stuff, what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place and lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim. td ameritrade. what if 30,000 people download the new app?
tv-commercial
12:55 pm
we're good. okay... what if a million people download the new app? we're good. five million? good. we scale on demand. hybrid infrastructure, boom. ok. what if 30 million people download the app? we're not good. we're total heroes. scale on demand with the number one company in cloud infrastructure. hewlett packard enterprise.
12:56 pm
what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley
12:57 pm
welcome back to the "halftime report." morgan stanley has a new report out on gender diversity and why it matters to the bottom line. you have taken a real deep dive into this. >> we ranked 1600 stocks on whether they were gender diverse, pay parity, we found the companies that are not diverse are much more volatile. stocks more volatile, big drawdown. it is sort of a proxy for quality in a way. we're just taking our normal models and looking at financial metrics and reranking them and boosting up those that are -- >> you say, okay, companies that have, let's say, generous benefit packages for new parents are the ones to look at. you specifically cite in this report netflix, microsoft, adobe, spotify, not public, facebook, twitter, among others. >> yeah. so we rank all 1600 globally. region, by sector, so we're not comparing big banks in new york,
12:58 pm
ceo comp to consumer staple in asia. we found kind of surprisingly that the ones that were really poor in diversity had much more volatile fundamentals. a nice kind of screen to overlay our current rankings. i can tell you investor interest in any kind of governance or social responsible or environmental investing is massive. >> we got reverse inquiries to us, you know, i love the portfolio. can you do an esg version and then run the numbers and it turns out in many cases, esg version does better. but then you have to realize you can't do that for a whole portfolio, no esg for emerging markets, for example. >> we're doing global stocks. i think 1600 stocks globally it depends on data availability. i think main issue with implementing it moneywise, you don't get a daily update on pay parity on a -- it is more of an annual feed. you have to use something else
12:59 pm
to sort this out. >> are we talking rank and file or are we specifically talking about the board level? >> we focus on the c suite, board level, and all ranks. two things we weight the most are four key committees on the board and pay parity. >> i appreciate you coming out here. it's been fun. >> have a good weekend. >> dr. adam parker, morgan stanley. i always do that to you. >> a last thought about what you're going to be thinking about heading into last quarter of the year. >> i think what you're going to see is profits for the third and fourth quarter accelerate. companies are going to do better than most people think and i think that's a recipe for a more solid backdrop in the equity market. in addition, i think when you're going to see is an earnings floor set on energy prices. if you're somebody that is short energy, given the news that came out of opec at the margin,
1:00 pm
you're going to be less likely to do that going forward and i think stocks will head higher. >> good having you here as well. thank you. he's with ubs. market picture looks good today. we are green and well there across the board. "power lunch" picks up that story with the deutsche bank latest now. ♪ indeed we do. thank you very much. good afternoon. i'm tyler mathisen. here is what's on the "power lunch" menu for friday. what a difference a day makes. 24 hours ago fears that germany's biggest bank was in trouble. today, the stock having its best day in five years. we're going to go inside the twists and turns of all things deutsche bank straight ahead. and battleground showdown. our andrew ross sorkin live in iowa on his squawk the vote tour, trade, manufacturing, immigration, all in play, big time, in the hawkeye state. i believe there are six electoral votes at stake there. and here's

109 Views

info Stream Only

Uploaded by TV Archive on